Trumka: Bank Bailout Language in Proposed House Financial Services Committee Bill Doesn’t Work
Today, AFL-CIO President Richard Trumka is delivering a message to Congress: The United States needs financial reform that works, and key elements of the proposed legislation covering bank bailouts fall far short of that standard.
In testimony today before the House Financial Services Committee, Trumka said while parts of the proposed bill on financial reform bring necessary changes, the elements dealing with the “shadow financial sector”—derivatives, hedges funds, private equity and bailout funds—are going in the wrong direction. As proposed, they could put even more power into the hands of unaccountable bankers without fixing the financial sector failures that led to our current crisis.
Trumka Demands Real Reform on Wall Street, Across the Economy
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On Wall Street today, AFL-CIO President Richard Trumka is calling for tough new regulations on the financial industry and a new approach to making the U.S. economy work for working people.
Trumka spoke today at the New York Stock Exchange as part of the new AFL-CIO leadership team’s national tour to set out a jobs-focused, progressive vision for the economy—and to fight back against the corporate agenda that left workers behind.
We’ve let wealth concentrate for too long, Trumka said. The past decade has shown us the folly of building an unfair and unequal economy that only works for a few, while working people pile up debt to get by. We need to be able to protect consumers from abuses by mortgage lenders and credit card companies and hold accountable those whose greed and irresponsibility have undermined the economy, Trumka said:
Banks and other financial institutions must be held accountable for making this mess that required trillions of dollars of our money to clean up. For the pain they’ve inflicted on families who face financial ruin—unemployment, wiped out pensions, foreclosures and bankruptcy.
In Georgia, New AFL-CIO Leaders Take on Banks, Support Flight Attendants
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The AFL-CIO’s new leadership team is kicking off its first days with a tour around the country, listening to workers and energized to turn around the economy. Today, they visited Atlanta to focus on the foreclosure crisis that has driven millions out of their homes—and the banks that enabled it.
AFL-CIO President Richard Trumka, Secretary-Treasurer Liz Shuler and Executive Vice President Arlene Holt Baker brought a message to an area hit by more than 40,000 foreclosures in just the past six months: We need an economy that protects everyone, not just finance-industry CEOs.
Speaking to a breakfast of faith leaders and community activists in Atlanta, Trumka said the finance industry undermined the economy by engaging in predatory practices in the hopes of profiting off of the most vulnerable:
It’s time banks are held accountable for the pain they’ve inflicted on families now faced with financial ruin, even foreclosures and bankruptcy. The banks and their fly-by-night business partners took advantage of people who wanted to buy a home, knowing full well they’d have to default, and lose their homes to the bank.
Trumka said that our economic crisis is due to the greed and irresponsibility of an economy that worked for only a few, while most workers struggled with stagnant wages and debt:
Our financial system is a shambles and we’re not going to restore its luster until we rein in the abuse by financial institutions like Wachovia that threw our economy into crisis.
Educating Timothy Geithner: The Congressional Review Panel on Capitol Hill
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The American people worry about how their $590 billion in taxpayer money is being spent in the big bank bailout—and, on Capitol Hill today, U.S. Treasury Secretary Timothy Geithner was told why. In his first appearance before the Congressional Oversight Panel (COP), which has spent nearly six months reviewing the expenditures of the Troubled Asset Relief Program (TARP), COP chairwoman Elizabeth Warren told Geithner:
People are angry that even if they have paid their bills on time consistently and never missed a payment, their TARP-assisted banks are unilaterally raising their interest rates or slashing their credit lines….People are angry when they read headlines of record foreclosures because even if they aren’t personally facing trouble with their mortgages, they see their own property worth less and their communities declining as a result of the foreclosures all around them.
I appreciate your repeatedly stated commitment to transparency and accountability…but more remains to be done. People need to understand why you are making the choices you are making.
Wal-Mart: Recession Profiteer
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Bank and insurance CEOs aren’t the only ones getting rewarded for horrendous behavior in this recession. There’s Wal-Mart, whom Newsweek now has anointed as “Our Corporate Savior.” (Hat tip to dakine01.)
“Wal-Mart recently announced that its same store sales in January were up 2.1 percent, which was more than forecast. With the company’s huge network of stores and ability to strong-arm suppliers, Wal-Mart offers shoppers good merchandise at prices which becomes more and more attractive as the downturn continues.”
The brutal truth is that Wal-Mart is profiting in the midst of misery because of policies that, like those of the financial services industry, fueled the nation’s economic disaster. While banks rolled up and peddled collateralized debt packages like cheap tuna wraps, Wal-Mart’s assault on America’s economy came from another angle–everyday low wages. By paying the vast majority of its workers little more than the minimum wage and offering health care plans most can’t afford, Wal-Mart shifted its corporate expenses to taxpayers.
600,000 Jobs Lost: How Bad Does It Have to Get for Republicans to Act?
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With today’s unemployment report showing nearly 600,000 jobs lost in January—worsening the U.S. unemployment rate from 7.2 percent to 7.6 percent—will obstructionist Republicans in Congress finally move the economic recovery bill?
From Bloomberg:
“Last month’s losses mark the first time since records began in 1939 that job cuts exceeded half a million in three consecutive months.”
While the official unemployment rate of 7.6 percent is really bad, the unofficial rate—which includes underemployed workers and those who have become too discouraged to look for work—is 13.8 percent. Some 21.5 million workers are either unemployed, working part time for economic reasons or dropping out of the labor force because they can’t find work.
If CEOs Take Our Money, We Can Limit Their Pay
We applaud—big time—the move by President Obama to limit the pay of CEOs on the taxpayer dole. If they can take our money to survive, they can cut back on the yachts and third homes. The Obama plan would cap salaries at $500,000 for top executives at firms that accept “extraordinary assistance” from the government.
As the Economic Policy Institute noted, the financial services industry pays its CEOs more than any other industry—in 2007, those salaries averaged nearly $18 million. Even the median salary—the typical CEO salary, with half of all CEOs earning less—is massive, with median CEO pay in financial services roughly $16.5 million in 2007.
Contrast this with the average wage in 2006 of a U.S. worker—$37,078. The median wage is even lower—$24,892.
Disaster: Unemployment at 7.2 Percent. Real Rate 13.5 Percent
The jobless numbers out today are worse than even the most pessimistic analysts imagined: 524,000 jobs lost in December, pushing the nation’s unemployment rate to 7.2 percent. Under the Bush administration, 2008 has become the worst year for job loss since 1945, with nearly 2.6 million jobs lost last year alone. The federal Bureau of Labor Statistics reports that 11.1 million of America’s workers are unemployed.
December was the 12th straight month of job loss and included a loss of 21,400 jobs in auto and parts industries. From Bloomberg:
Manufacturing, which makes up 12 percent of the economy, shrank in December at the fastest pace in 28 years, Institute for Supply Management figures showed. Payrolls at builders dropped by 101,000 after decreasing 85,000. Financial firms reduced payrolls by 14,000, after a 28,000 loss the prior month. Service industries, which include banks, insurance companies, restaurants and retailers, subtracted 273,000 workers after a decline of 402,000.
